Blames decision for banking crisis; alleges that nationalisation enabled Congress to consolidate both political and economic power.

New Delhi: A think-tank associated with the BJP has written to Prime Minister Narendra Modi, calling for the appointment of a commission to probe then Prime Minister Indira Gandhi’s decision to nationalise banks in 1969.

“I would like to request for a commission of enquiry into the nationalisation of banks undertaken by Smt Indira Gandhiji in 1969 and the banking crisis that has occurred within the public sector banks since then. The fact alone raises the suspicion as to why nationalisation of banks was done and if it was done with the said objective, then why is it not the case that the objective was achieved,” said Sumit Bhasin, the director of the Public Policy Research Centre (PPRC), which has among others BJP MP Vinay Sahasrabuddhe and BJP leader Nalin Kohli as its board of directors

The think-tank also wants the commission to probe the recurring loan crisis in the banks.

Pointing out that public sector banks have been reeling under a bad debt crisis, the research centre has asked the PM to hold accountable everyone responsible for non-performing assets (NPAs).

“The erosion of wealth is a great cause of concern and thus a systematic inquiry by the government is the need of the hour to ensure that the mala fide intention behind ‘nationalisation’ stands exposed and all those responsible for such erosion are held accountable,” read the letter.

The letter accessed by ThePrint, said the current NPA crisis that the banks face in India, specifically the public-sector banks, have eroded a massive amount of wealth in the post-nationalisation era.

‘Congress benefitted from nationalisation’

The letter further said that nationalisation has only enabled the Congress to further consolidate power, both political and economic.

“This was done by political appointees deciding upon lending decisions and forging a greater nexus between the economic and political powerhouse. As a result of this inequality increased as access to credit was restricted to only those who had credit and this only worsened in the pre-nationalisation era,” the letter states.

Praising the Modi government efforts to ensure greater financial inclusion through Jan Dhan, the letter made a case for systematic evaluation of NPA crisis of banks in India.

“This would depict how the same individuals were given massive amounts of credits that were later written off at the expense of taxpayers’ money. This made the public-sector bank weak and ruined their procedures of due diligence in lending. As you might be aware, the same trend could be observed in UPA-II for which current government is required to make provision for funds for recapitalisation,” the letter reads.

When contacted, the director confirmed that a letter has been sent to the PM.

Sources said the letter is likely to be acted upon as the research centre is backed by the BJP and RSS.

2 COMMENTS

The first term of reference for the Commission should be to probe why successive governments, some of different political persuasions, have lacked the nerve to reverse this terrible decision, which has now brought the government owned banking system to a stage of terminal decline.